Stimulus Snake Oil

Media promote nonsensical GOP talking points

As debate over the White House’s economic stimulus plan took center stage in corporate media in February, citizens who wished to understand the details had to swim upstream against a current of Republican spin and misinformation.

A study from Think Progress (1/28/09) found the lawmakers who appeared on cable news channels (CNN, MSNBC, Fox News, Fox Business Channel and CNBC) to discuss the stimulus from January 26-28 tilted Republican by a 2-to-1 margin. A subsequent analysis by the online outlet (2/6/09) showed much the same tilt, and pointed out that many of TV’s Democratic legislative sources were right-leaning legislators who favored a smaller bill with more tax breaks. For a bill that seemed to have a majority of lawmakers supporting its passage, the media’s interest in dissenting viewpoints was instructive; as long as that dissent comes from the more conservative side, it tends to get a more-than-fair hearing in the media.

Such comments seemed to express surprise—or outrage—that a government-financed stimulus package would involve the government spending money. But spending is precisely the point of the legislation; since the Federal Reserve has already lowered interest rates close to zero, spending (along with tax cuts targeted to the poor) is by far the most effective way for government to stimulate economic activity (Moody’s Economy.com, 1/21/09). Yet complaints that the stimulus plan would do what it was designed to were central to coverage, as when anchor Harry Smith opened a CBS Evening News report (1/30/09) by saying: “The Republicans’ biggest complaint about the stimulus bill is it just gives Democrats an excuse to make government bigger. [Correspondent] Wyatt Andrews says the examples are not hard to find.”

CNN anchor Campbell Brown and chief business correspondent Ali Velshi had a similarly confounding exchange on January 27 over whether some aspects of the bill would produce any increase in economic activity. As Brown explained, “Food stamps, unemployment benefits [are] not likely to stimulate the economy because these are the people who are in the most dire straits spending the bare minimum.” In fact, virtually any economist will tell you that the poor are most likely to spend money given to them, so programs that benefit them have the greatest stimulative effect (Center on Budget and Policy Priorities, 1/24/09).

There are some of these things that are more about recovery than stimulus. The administration likes to call it a recovery bill. If you’re giving food stamps and you’re giving unemployment benefits, that’s not stimulus; that’s simply helping people out who are in a lot of trouble.

Given the media’s oft-repeated goading of Democrats to move to the right, it was no surprise to see reporters criticizing the White House for not acceding enough to Republican demands. In fact, for many in the press, it seemed a stimulus bill that provided less stimulus would be preferable so long as it was the product of bipartisanship. Washington Post columnist David Broder wrote (2/1/09) that it is “really important for Obama to take the time to negotiate for more than token Republican support in the Senate…Nothing was more central to his victory last fall than his claim that he could break the partisan gridlock in Washington.” Actually, poor economic conditions and the extreme unpopularity of the Republican incumbent were probably each more central.

In the Wall Street Journal (2/5/09), Gerald Seib was similarly disappointed: “One of Washington’s biggest problems in recent years has been that it resembles a doughnut: It’s got a hole in the center.” Seib was encouraged that a “hardy band” of “centrist” senators was meeting to craft some sort of compromise—which amounted to adding tax cuts and cutting roughly $100 billion in spending, including food stamps, aid to Head Start and public schools.

There were some voices in the media debate, like New York Times columnist Paul Krugman (e.g., 1/26/09), who aggressively pushed back against the GOP’s anti-stimulus talking points. And Washington Post business columnist Steven Pearlstein (2/6/09) was frustrated enough to write:

My modest proposal is that lawmakers be authorized to hire personal economic trainers over the coming year to sit by their sides as they fashion the government’s response to the economic crisis and prevent them from uttering the kind of nonsense that has characterized the debate over the stimulus bill during the last two weeks.

While that would surely be impractical, there’s no doubt that the public debate would have been vastly improved if the corporate media did more to challenge Republican “nonsense.”